Congress fires refinery polemics

Jaipur, April 19 : The state’s first refinery at Barmer, which is yet to come up,has churned up enough politics already. Now the Opposition Congress, which signed the first deal to bring the refinery to the state, says that the new deal is just a hogwash as it has almost the same terms and conditions as the previous agreement and unlikely to benefit the people as is being projected by this government.

After the signing of a reworked MOU between the state government and HPCL yesterday, the latest salvo is from former Chief Minister Ashok Gehlot, who is questioning the state’s equity in the project, which remains same at 26%.

Gehlot in a statement today questioned the BJP government’s constant criticism of the MOU signed by the previous government as they had said it was not done keeping in mind the welfare of people of the state. He questioned why hasn’t the BJP government been able to increase equity share in the reworked MOU as was being claimed.

Gehlot said the earlier MOU was not followed and setting up of refinery stopped only because the BJP government did not want the Congress to get any credit for bringing the first refinery to the state. He said clearly they did not want the refinery to start otherwise why would they take a year to appoint a consultant for it?

He said the project has been delayed for more than four years and hence the benefits like employment, development of ancillary industry, technology, insurance and banking, revenue earnings which would have started flowing by now, have eluded the people.

Also the setting up the refinery has become costlier. Earlier the refinery was being set up at a cost of Rs 37,229 crore and now the cost has increased over Rs 6000 crore and it stands at Rs 43,129 crore.

He asked the Internal Rate of Return (IRR) of the refinery project has not been specified, which was 15% during Congress’s time.
He said if IRR is less than this, then the government’s earnings would be less as it has an equity of 26% only.

He said the details of the MOU should be made public so that people of the state would know what is the actual picture with regard to refinery.

Congress’s Opposition leader in the House Rameshwar Dudi has challenged Raje for a debate over the refinery in the House. He said the foundation stone of the refinery was laid in Pachpadra in September 2013 and by now the refinery would have been set up and commenced operations.
And only if Raje had not been so obstinate and autocratic, the state would have started earning Rs 20,000 crore annually.

Meanwhile, the Barmer project is slated to run for 30 years with an annual production of 9-million tonne crude oil. The new deal would save the state over Rs 40,000 crore, claims the BJP government.

The reworked agreement is expected to bring down the state’s financial burden from Rs 56,000 crore to about Rs 16,000 crore, saving the exchequer about Rs 40,000 crore compared to the previous MoU signed by the Ashok Gehlot-led Congress government in 2013.

While the previous MoU pegged the state’s monetary support to the project at Rs 3,871 crore, the new deal brings it slightly down to Rs 3,738 crore.

The BJP government says the state’s monetary burden has been brought down down by the reworked Viability Gap Funding (VGF).
Under the previous MoU, the state was to pitch in Rs 3,736 crore as VGF for 15 years. The new deal brings this down to Rs 1,123 crore, the total proposed VGF now being Rs 16,845 crore compared to Rs 56,040 crore under the previous pact.

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